TAUNTON — The city’s chances of becoming a hub of medical marijuana production and sales are in jeopardy now that state officials have reviewed and rejected the applications of two groups hoping to set up shop in the Silver City.

The competing applicants were both among 20 nonprofit companies granted provisional licenses in January by the Massachusetts Department of Public Health.

DPH announced Friday that just 11 of 20 registered marijuana dispensary applicants would advance to an “inspectional phase.”

The elimination of nine applicants resulted from a “verification phase” enacted in response to complaints and questions raised by previously rejected applicants, as well as media outlets, about allegations of conflicts of interest and lack of veracity.

Former Bay State congressman William Delahunt’s Medical Marijuana of Massachusetts initially was given the green light to open medical pot dispensaries in Plymouth, Taunton and Mashpee.

The East Taunton facility was to have been located in a building on Revolutionary Drive in the Liberty and Union Industrial Park.

That industrial park, coincidentally, includes land under a real estate, option contract with Mashpee Wampanoag Indian Tribal Council, Inc., which is now awaiting federal, land-into-trust approval to build a resort casino complex.

The other nonprofit company on the state’s rejection list with ties to Taunton was Greeneway Wellness Foundation.

Greeneway’s prior approval for a dispensary in Cambridge was rejected for what was described by the DPH as questionable financial resources.

Plymouth-based Greeneway’s chief executive, John Greene, in a press release Saturday, said he would appeal the DPH decision rejecting his application for the Cambridge marijuana dispensary.

Greene initially wanted to open a single facility in Taunton to grow and dispense marijuana products to people suffering serious ailments and diseases, who would receive a doctor’s recommendation for various products.

But the state stipulated Greene would have to keep the two separate, which led to his application and approval for a dispensary in Cambridge and a “cultivation” facility in Taunton.

The marijuana, Greene said, would be trucked from Taunton to Cambridge.

The Taunton City Council approved a request for a special permit in late March for Greeneway to open a cultivation facility in one half of a 90,000-square-foot, industrial-zoned building at 30 Mozzone Blvd.

The other half of the building is now being used as a material-recovery facility by WeCare Organics, the trash-recycling company hired by the city to dispose of all single-stream, curb-side trash.

After the City Council’s vote, Daniel DaRosa, who owns the Mozzone Boulevard building and is president of Taunton-based B&D Construction, said he anticipated Greeneway’s operations would be underway before August.

DaRosa, who paid over $2 million for the building in 2013, did not return calls seeking comment about the possibility of an alternative use.

Page 2 of 3 - Mayor Thomas Hoye Jr. declined to comment specifically on either Greeneway or the Delahunt-related project in East Taunton.

But he said the DPH should have done a better job vetting each applicant instead of letting them “get as far as they did.”

“I think the initial screenings were lax,” Hoye said. “It’s frustrating that at the end of the day it’s their decision and not ours.”

The mayor has previously refused to say if he favored the passage in 2012 by voters legalizing medical marijuana in the commonwealth.

Hoye, as well as most city councilors, instead have stressed that there’s nothing objectionable in welcoming a medical marijuana business, as long as it meets all legal guidelines and operates in an industrial-zoned area as designated by city ordinance.

Greene did not return a call seeking comment.

But his media spokesman Frank Perullo reiterated Greene’s press release that “many” banking institutions have patently refused doing business with Greeneway because of fears of violating banking statutes — by dint of their accepting money from activities still considered illegal under federal statute.

“Just less than two weeks ago, we were rejected by a small bank after John spent two months trying to set it up,” Perullo said.

Perullo doesn’t dispute a letter by Karen van Unen, director of the state’s medical marijuana program, stating that $1.3 million in three savings accounts listed on Greeneway’s application were emptied the day after it was submitted to DPH.

Of that amount, $500,000 in capital was for an initial application and $400,000 for two subsequent applications.

Perullo, however, said Greene had no alternative but to return the monies to his 30 investors, with whom he then secured “custodial” agreements.

“The money was always going to be removed, because three or four major banks asked that the money be removed. He’s had a lot of trouble getting banks to keep the money,” Perullo said.

He said Greene has always been “transparent” but also “outspoken,” which, to some extent, might have worked against him.

“They just don’t like the fact this is how we’ve handled it,” Perullo said, adding that “it’s kind of a Catch-22 situation.”

Perullo said Greeneway will file a motion for appeal today or Tuesday in Suffolk Superior Court; he said it could take 30 to 60 days for a decision to be rendered.

Perullo said if the court rules in Greeneway’s favor, he’s hopeful the Taunton growing facility will begin operating by next January.

Page 3 of 3 - Dick Shafer, who since retiring as Taunton’s economic director has acted as a part-time project manager for Taunton Development Corporation, said the industrial park building Medical Marijuana of Massachusetts planned to move into is owned by a local roofing business owner, who he says would like to lease it as an investment.

Shafer said the Delahunt-related nonprofit, like Greeneway, would have been required to go before the City Council for a special permit. He said it also would have to abide by TDC deed restrictions and covenants.

But he said he’s not surprised the group arranged to be a tenant before submitting an application to the state: “You need an address to apply for these types of things,” Shafer said.